a quick tax question

V

vladiator

that will probably reveal just how little I know about taxation...
If I formed an hedge fund (via an LLC) and have capital gains that are subject to taxes, do I get to reduce this tax liability by the legal expenses we incured to form the LLC, the cost of buying the hardware etc etc?
Thanks a bunch.
 
Quote from vladiator:

that will probably reveal just how little I know about taxation...
If I formed an hedge fund (via an LLC) and have capital gains that are subject to taxes, do I get to reduce this tax liability by the legal expenses we incured to form the LLC, the cost of buying the hardware etc etc?
Thanks a bunch.
More...

Yes; however you would amortize the start-up legal expenses and the hardware could be expensed up to around $20K, then it would have to be capitalized and depreciated.
 
metooxx- My accountant wants me to take my 1% fee as part of my management company, and my performance allocation as a direct bonus to myself. He says that I can't deduct expenses against my performance allocation. I think that my fund expenses will be larger than my 1% fee. How can I deduct these expenses. Specifically, is there a better way to orgainze fee income so that I get my performance allocation attributed to the management company?
 
Quote from praetorian2:

metooxx- My accountant wants me to take my 1% fee as part of my management company, and my performance allocation as a direct bonus to myself. He says that I can't deduct expenses against my performance allocation. I think that my fund expenses will be larger than my 1% fee. How can I deduct these expenses. Specifically, is there a better way to orgainze fee income so that I get my performance allocation attributed to the management company?
More...

That makes no sense; sending you a PM ...
 
Quote from metooxx:



Yes; however you would amortize the start-up legal expenses and the hardware could be expensed up to around $20K, then it would have to be capitalized and depreciated.
More...

Thanks Metoxx, can you and/or Praetorian please also post (or PM me?) on the solution to his situation once you figure it out? I'm sort of in the same boat concerning the treatment of the fees/bonuses I receive... If you have time, of course.
Thanks a lot for your help.
Vlad.
 
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